DURHAM, N.C. -- Raising the normal retirement age in the United States to
70 could save the federal government billions of dollars each year and help
shore up the ailing Social Security trust fund over the long term, according
to two university researchers.
Increasing the normal retirement age would be a plausible move because Americans are enjoying longer, healthier lives, said demographer Kenneth G. Manton of Duke University and actuary H. Dennis Tolley of Brigham Young University. They said the Social Security trust fund could save roughly $50 billion to $60 billion on each year's group of workers by requiring them to wait until age 70 to receive full Social Security benefits, instead of the current retirement age of 65.
And those savings "only represent part of the benefit of such an increase in retirement age in that not only would expenditures not be made, but persons who did continue to work would contribute to revenues through income and other taxes," the two researchers wrote in a report prepared for the Social Security Administration, which funded the study. They said that each year of age increase in the retirement age decreases payments for a year and increases revenues for a year.
To come up with their findings, Manton and Tolley studied health and mortality data from several National Long Term Care Surveys -- longitudinal surveys of the U.S.'s elderly population sponsored by the National Institute on Aging -- as well as information on Social Security and disability insurance payments. On average, they said, increasing the normal retirement age to 70 could save 95 cents of every dollar now spent on people 65 to 69 years old who have retired with full Social Security benefits. The savings would not be nearly as great if there were a large increase in disability payments for workers once they pass age 65, but that has not been the case, the researchers said.
They noted in their report there are a number of variables
Contact: Keith Lawrence